Buy-to-let property investments: a Look at Both Sides of the Coin

If you are undecided about buying rental properties and aren’t quite sure if they are the best investment route to take, here’s a look at both sides of the coin to help get you off the fence.

The upside to Buy-to-let investments
1) The market is commendably stable

Investments can be tricky to pull off and maintain particularly in competitive niches such as weight loss/fitness where your product can in an instant go from being the in-thing hotcake that everyone desires to the unwanted cast away that few will give a second thought. You’ll not need to worry about such predicaments with the real estate market as it is very stable and affords an almost constant amount of revenue that rarely, if ever, dips.

2) A good purchase results in growing property value

The other great thing with the real estate market is that if you buy in a good location, your property value will always be on the upward trend. This means you can get more out of them from a rental perspective and from a sale point of view should you decide to cash in.

3) The market is more inclined towards renting than purchasing new homes

And this is great news for the investor. With a majority of the working class unable to purchase a permanent home, a rental property affords a nice compromise. Moreover, purchasers are certain to buy in bulk so as to establish their property portfolio.

The downside to Buy-to-let investments
1) The buy-in is usually quite steep

Rental properties don’t come cheap, so you need to be prepared to foot the expenses of hefty loans and/or mortgages that come with it. So before you take the step to buy such a property, ensure your credit cards are in order and that you can hold your own for some time while your investment is finding its feet.

2) There will be spells of vacancy

Even the most highly-sought after properties will experience a downtime in terms of vacancy and this means lost revenues from unpaid rent and having to foot recurring expenses off your pocket. This problem is however usually prevalent when you’re just starting out and you’ll only experience the occasional vacancy every now and again unless you are in an area with seasonal occupancy such as near a university.

3) Property value can take a hit

While quite rare, it is possible for a buy-to-let investment to experience a dwindling value trend especially during times of extreme financial crisis. You may also find it hard to jump ship at such a time unless you are prepared to count huge loses. Nonetheless, such periods don’t last too long and its usually just a matter of weathering out the storm.

So are Buy-to-let investments the right way to go? Well, the real estate market is one of the most controlled and understood industries in the world and it doesn’t take a genius to get the hang of it so yes. All in all though, weigh the pros and cons on opposite sides of your preference scale to determine whether you should take the plunge.